An Orange County General Corporate Consulting Attorney on a Member Managed Single Member LLC

Although it may seem obvious that a single member LLC will conduct business in a member-managed capacity, there is also the option to operate as a manager-managed entity. It is important to understand which alternative is more beneficial for you and your company.

Default Option

If you do not specify, your single member LLC will be treated as member-managed. Consequently, there will in essence be no difference between ownership and management.

Delegation of Authority

The member-manager may choose to delegate certain responsibilities to another individual, but that person is not a manager under the law. The member-manger is the only person who can conduct the essential activities of the business, such as entering into contract, hiring and firing or borrowing money.

Transfer many who opt for a member-managed business make no provisions for incapacity or death of the owner; this can be devastating to the survival of the company. It is more likely that a manger-managed LLC has made provisions within the operating agreement for such an eventuality. For this reason, it may be easier to transfer management authority in a manager-managed LLC.

Contact an Orange County General Corporate Consulting Attorney for Legal Advice

Selecting the optimal type of entity under which your business will operate can be critical for ongoing, long-term financial success and minimizing liability. Explore your options with a knowledgeable professional. Call Daily Aljian, LLP, an Orange County general corporate consulting attorney, at 949-861-2524.